Travelzoo (TZOO) AI Stock Analysis

• Market Cap: $140.56M
• Dividend Yield: N/A
• Average Volume (3M): 142.81K
• Price to Earnings (P/E): 11.9
• Beta (1Y): 0.73
• Revenue Growth: -0.68%
• EPS Growth: 34.16%
• Country: US
• Employees: 227
• Sector: Communication Services
• Sector Strength: 98
• Industry: Advertising Agencies
• EPS (TTM): 1.05
• Shares Outstanding: 11,245,137
• 10 Day Avg. Volume: 111,402
• 30 Day Avg. Volume: 142,814
• PEG Ratio: 0.35
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.83
• Price to Cash Flow (P/CF): 4.90
• P/FCF Ratio: 4.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $20.50
• Price Target Upside: 70.55% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Travelzoo's stock is rated moderately, reflecting strong profitability and cash generation offset by financial stability concerns due to negative equity. Technical indicators suggest caution due to downward momentum. Valuation appears fair, but the lack of dividend yield limits appeal. The earnings call provided a cautiously optimistic outlook, though challenges in revenue growth and regional performance must be addressed.

Positive Factors

Profitability

Steps to reduce the cost base of the business have helped to grow profitability.

Revenue Growth

The company expects Q1 revenue to improve, in part supported by the shift to providing a paid membership product, which management indicated as providing a 5% tailwind.

Share Repurchase

Travelzoo has been active in repurchasing shares, buying back $18.9 million in stock in 2024.

Negative Factors

Earnings

Fourth quarter revenues of $20.8 million were below estimates and below the year-ago level, with management having expected growth in the period.

Geopolitical Challenges

There are concerns about consumer price sensitivity and geopolitical challenges affecting advertiser sentiment.

Market Transition

There is meaningful uncertainty created by the shift in its model to prioritize a subscription-based service.

Travelzoo Business Overview & Revenue Model

Company Description

Travelzoo, an Internet media company, provides travel, entertainment, and local deals from travel and entertainment companies, and local businesses in the Asia Pacific, Europe, and North America. Its publications and products include Travelzoo Website; Travelzoo iPhone and Android apps; Travelzoo Top 20 email newsletter; and Newsflash email alert service. The company also operates the Travelzoo Network, a network of third-party Websites that list travel deals published by the company; and Local Deals and Getaway listings, which allow its members to purchase vouchers for deals from local businesses, such as spas, hotels, and restaurants. It serves airlines, hotels, cruise lines, vacations packagers, tour operators, destinations, car rental companies, travel agents, theater and performing arts groups, restaurants, spas, and activity companies. Travelzoo Inc. was founded in 1998 and is headquartered in New York, New York.

How the Company Makes Money

Travelzoo generates revenue primarily through advertising fees paid by travel, entertainment, and local businesses that wish to promote their offers to Travelzoo's extensive member base. The company's key revenue streams include listing fees charged to businesses for featuring their deals in Travelzoo's publications and performance-based fees that depend on the success of the promotions. Additionally, Travelzoo leverages partnerships with airlines, hotels, cruise lines, and local businesses to secure exclusive deals that attract users. These partnerships are significant contributors to Travelzoo's earnings, as they enhance the value proposition for its members and drive engagement across its platforms.

Travelzoo Financial Statement Overview

Summary

Travelzoo shows strong profitability and cash flow performance, with efficient cost and cash management. However, the negative equity on the balance sheet raises concerns about financial stability, despite a slight revenue decline.

Income Statement

Travelzoo's income statement reveals a strong gross profit margin of 87.5% for TTM, indicating efficient cost management. The company shows a solid net profit margin of 16.1% for TTM, reflective of profitability. While the revenue has slightly decreased by 0.68% from the previous year, the EBIT and EBITDA margins have improved to 22.0% and 22.7% respectively, showcasing enhanced operational efficiency.

Balance Sheet

The balance sheet highlights a concerning negative stockholders' equity of -$462,000, raising red flags about financial stability. Despite a reasonable debt-to-equity ratio in the past, the current negative equity skews this metric unfavorably. With an equity ratio now nonexistent due to negative equity, the company's asset financing is primarily through debt, posing potential risks.

Cash Flow

Cash flow analysis shows robust free cash flow growth of 99% year-over-year, indicating strong cash generation capabilities. The operating cash flow to net income ratio is a healthy 1.54, and the free cash flow to net income ratio stands at an impressive 1.53, both suggesting effective cash conversion from earnings.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
83.90M	84.48M	70.60M	63.19M	53.60M
	Gross Profit
73.43M	73.54M	60.60M	51.66M	43.04M
	EBIT
18.50M	15.57M	7.56M	-972.00K	-11.15M
	EBITDA
18.50M	17.46M	9.75M	507.00K	-8.95M
	Net Income Common Stockholders
13.56M	12.37M	6.63M	911.00K	-11.18M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
17.06M	15.71M	18.69M	43.81M	63.06M
	Total Assets
54.72M	55.38M	67.27M	100.08M	102.40M
	Total Debt
8.12M	9.25M	11.30M	12.29M	18.02M
	Net Debt
-8.95M	-6.47M	-7.39M	-31.52M	-45.04M
	Total Liabilities
50.37M	46.50M	58.42M	99.45M	95.90M
	Stockholders Equity
-462.00K	4.19M	4.26M	-3.98M	1.89M
Cash Flow		Free Cash Flow
20.92M	10.42M	-24.63M	-8.11M	46.56M
	Operating Cash Flow
21.10M	10.68M	-23.12M	-8.08M	46.82M
	Investing Cash Flow
-177.00K	-39.00K	-1.31M	104.00K	2.07M
	Financing Cash Flow
-18.97M	-14.15M	1.28M	-11.16M	-6.78M

Travelzoo Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 12.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TZOO, the sentiment is Negative. The current price of 12.02 is below the 20-day moving average (MA) of 13.33, below the 50-day MA of 16.22, and below the 200-day MA of 15.02, indicating a bearish trend. The MACD of -0.98 indicates Negative momentum. The RSI at 35.17 is Neutral, neither overbought nor oversold. The STOCH value of 21.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TZOO.

Travelzoo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EXPE	74 Outperform	$20.83B	18.07	79.84%	0.25%	6.64%	69.85%
BKNG	72 Outperform	$151.49B	26.73	-146.32%	0.78%	11.11%	47.03%
TCOM	67 Neutral	$36.34B	15.91	12.91%	0.51%	18.12%	69.44%
TRIP	61 Neutral	$1.77B	764.24	0.55%	―	2.63%	-58.77%
TZOO	59 Neutral	$140.56M	11.88	494.69%	―	-0.68%	34.16%
Sector *	58 Neutral	$26.94B	3.15	-10.67%	4.32%	2.14%	-43.11%
SABR	43 Neutral	$961.31M	―	20.22%	―	4.19%	53.84%

Travelzoo Corporate Events

Travelzoo Reports Q4 2024 Financial Results

Travelzoo reported its financial results for Q4 2024, with a revenue of $20.7 million, a slight decrease of 2% year-over-year, but an 8% increase in consolidated operating profit to $4.9 million. The North American segment saw a 1% revenue increase, while the European segment experienced a 13% decline due to fluctuations in Germany. Jack’s Flight Club, in which Travelzoo holds a 60% stake, reported a 19% revenue increase. The company also highlighted its new membership fee structure, which is expected to drive future revenue growth.